EXHIBIT 10.2
                         ESPEY MFG. & ELECTRONICS CORP.
                           Executive Officer Contract

                            HOWARD PINSLEY AGREEMENT
                            ------------------------

AGREEMENT  dated as of May 25,  2006,  by and between  Espey Mfg. &  Electronics
Corp.,  a New York  corporation  having its  principal  place of business at 233
Ballston  Avenue,  Saratoga  Springs,  New York 12866 (the "Company") and Howard
Pinsley, an individual residing at 5 Longwood Drive, Saratoga Springs, New York,
12866 (the "Employee").

WHEREAS,  the Employee has been a valued employee of the Company for many years,
and is now President and Chief Executive Officer of the Company;

WHEREAS,  the Board of Directors of the Company has approved an extension of the
provisions  of an  agreement  with the Employee  originally  dated as of July 1,
2002.

NOW, THEREFORE,  in consideration of the mutual promises and covenants set forth
herein, the parties agree as follows:

                  1. RESIGNATION OR TERMINATION. Upon the Employee's resignation
                     --------------------------
         or  termination  during  the  Term  (as  hereinafter  defined)  of this
         Agreement,  the Employee  shall become a  non-executive  officer of the
         Company  for a period of  thirty-six  (36) months from the date of such
         resignation or termination.

                  2. COMPENSATION AND DUTIES. In consideration of the Employee's
                     -----------------------
         services  for  a  period  equivalent  to  5  days  a  month  after  his
         resignation  or  termination,  and  to  perform  duties  as  reasonably
         requested by the Company and to comply with  paragraph 5 herein,  it is
         agreed as follows:

                  (A) The Employee  shall receive  $15,000 a month,  and, to the
         extent  permissible,  all  benefits  being  received at the time of his
         resignation or termination for a period of three months, after the date
         of resignation or termination.

                  (B) At the  end of the  above  three  months,  the  Employee's
         compensation   will  change  to  $4,333.33   per  month  for  the  next
         consecutive  33 months,  and he shall  receive all current  benefits as
         above.  The Employee  shall be eligible to  participate,  to the extent
         permissible,  in new  benefits  should they occur during this period of
         time.  For ESOP and all other  benefit  purposes,  the  Employee  shall
         continue to be treated as a full-time  employee for the duration of the
         Agreement to the extent  permissible  and consistent  with the terms of
         the ESOP and all applicable laws.

                  (C)  It is  agreed  that  the  Employee  shall  be  reasonably
         available by telephone or otherwise to render  advice and counsel,  but
         need  not be  physically  present,  unless  his  physical  presence  is
         reasonably  requested  by the  Company.  The  parties  agree  that  the
         Employee need not be physically  present at the Company's offices after
         the date of his  resignation  or  termination.  Should the  employee be
         required  to  engage  in any  activity  not  within  the  scope of this
         agreement,  he shall be reimbursed,  in addition to his monthly salary,
         at an hourly rate to be  mutually  agreed  upon  between an  authorized
         representative of the Company and himself.

                  (D) If the  Employee  dies during the Term of this  Agreement,
         including  death prior to the date of resignation or  termination,  the
         compensation  payments  provided  for in Sections 2 (A) and (B) will be
         paid, as scheduled,  to the Employee's  estate or the aggregate  amount
         payable may be prepaid at the Company's election. If the Company elects
         such a prepayment pursuant to this Section, the prepayment amount shall
         be reduced by fifteen  percent  (15%).  In the event of the  Employee's
         death, all other benefits shall cease at death.

                  (E) The compensation  and benefits payable  hereunder shall be
         the  Employee's  sole  and  exclusive   remedy  in  the  event  of  his
         resignation or termination.

29
<PAGE>

                  (F) The number of days of service per month  required from the
         Employee  may be  reduced  to a number  not less  than  two,  provided,
         however,  in no event shall the  reduction  trigger a  separation  from
         service while the Employee is a "key  employee" for purposes of Section
         409A of the Internal Revenue Code of 1986, as amended.

         3.  EXPENSES.  If the Employee is requested by the Company at any point
             --------
during the Term of this  Agreement  to return to  Saratoga,  and the Employee is
then not in the Saratoga  Springs  area,  the Company  shall pay the  reasonable
transportation  costs for the  Employee  to return.  The  Employee  shall not be
reimbursed for any other expenses  hereunder unless the Employee and the Company
so agree with respect to a specific expense.

         4. TERM.  This  Agreement  shall  continue in effect until December 31,
            ----
2008 at which time this Agreement shall terminate (the "Term").  Notwithstanding
the termination  date of this Agreement,  if the Employee  resigns or terminates
prior to December 31, 2008 then the provisions of this Agreement  shall continue
in effect.

         5. RESTRICTIVE COVENANT: CONFIDENTIAL INFORMATION.
            ----------------------------------------------

            (A) The Employee  agrees that during the Term of this  Agreement and
for a period of five (5) years thereafter,  he shall not directly or indirectly,
on behalf of  himself  or on behalf of any other  corporation,  person or entity
other  than the  Company,  compete or  interfere  with the  Company,  render any
services  to,  consult  for,  contract  with or  become  an  employee,  officer,
director, partner, member, or (except as a five percent (5%) or less shareholder
of any publicly  traded  company)  owner or  shareholder  of, any  individual or
entity which engages in the Company's  business or which otherwise competes with
the Company.

            (B) The Employee  recognizes  and  acknowledges  that there has been
made available to him confidential  information  concerning matters affecting or
relating to the products, services or business of the Company, its subsidiaries,
or affiliates, including, but not limited to, intellectual property, technology,
proprietary  information,   customer  lists  and  other  financial  information,
contractual  relationships,  past or contemplated  actions,  personnel  matters,
marketing or sales data and written or oral  communications or understandings of
any  sort of the  Company  or of any of its  customers  in  either  tangible  or
intangible form  ("Confidential  Information").  The Employee further recognizes
and acknowledges that this Confidential Information as it may exist from time to
time  belongs to the Company and is a valuable,  special and unique asset of the
Company's  business.  The  Employee  will not,  during or after the Term of this
Agreement, at any time, directly or indirectly, divulge, disclose or communicate
any Confidential Information to any person, firm,  corporations,  association or
other entity for any reason or purpose whatsoever.

The Employee will promptly deliver to the Company all copies of all Confidential
Information  and all material of any nature  belonging  to the Company,  and the
Employee will not take with him any such Confidential Information,  materials or
reproductions thereof or any proprietary  information of the Company in tangible
or intangible form.

         6.  MISCELLANEOUS.  Not withstanding any provision in this Agreement to
             -------------
the  contrary,  if during the Term of this  Agreement the Employee is terminated
from the Company for good and  sufficient  cause then all  payments and benefits
provided herein shall  immediately  cease unless the Employee seeks  Arbitration
pursuant  to Section  14.  Arbitration  herein in which case such  payments  and
benefits shall continue until the arbitrator has made an award or decision. Good
and  sufficient  cause shall mean:  (a) willful  misconduct  with respect to the
reasonable  directions  of the  Board;  (b)  conviction  of a crime or  indecent
exposure;  or (c) gross  negligence or  malfeasance  in the  performance  of his
obligations hereunder.

         7.  SUCCESSOR  AND ASSIGNS.  This  Agreement  shall be binding upon and
             ----------------------
insure  to the  benefit  of the  parties  hereto,  and  their  respective  legal
representatives, heirs, successors and assigns.

         8. NOTICES. Any notices,  consents or information required or requested
            -------
or permitted  by this

30
<PAGE>

Agreement shall be sent to the parties at the addresses shown above, unless such
address is changed by written notice hereunder.

         9.  SEVERABILITY.  In the event any provision of this  Agreement or any
             ------------
portion thereof shall be deemed invalid or  unenforceable  for any reason,  that
portion  or  provision  shall be deemed  excised  from this  Agreement  and this
Agreement shall be governed, interpreted and enforced in all respects as if such
invalid or unenforceable provision were originally omitted from this Agreement.

         10.  WAIVER.  The waiver of any party of a breach of any  provision  of
              ------
this  Agreement  shall  not  operate  as or be  construed  as a  waiver  of  any
subsequent breach.

         11. GOVERNING LAW. This Agreement shall be governed by and construed in
             -------------
accordance with the laws of the State of New York.

         12. HEADINGS.  The descriptive  headings used in this Agreement are for
             --------
purposes of convenience only and do not constitute a part of this Agreement.

         13. ENTIRE AGREEMENT.  This Agreement is the entire Agreement among the
             ----------------
parties regarding the subject matter hereof, and supersedes any prior agreements
or discussions.

         14.  ARBITRATION.  Any claim,  controversy or dispute arising out of or
              -----------
relating to this Agreement, or the breach thereof, shall be settled by final and
binding  arbitration  before a single arbitrator in accordance with the rules of
the American  Arbitration  Association,  and judgment upon the award or decision
rendered by the Arbitrator may be entered in a court. Any such arbitration shall
be held in New York and the parties to this  Agreement  shall share  equally the
costs of the arbitrator.

This  AGREEMENT may not be altered or amended  except in writing  signed by both
parties.  In the event of any conflict  between this  Agreement and the terms of
any of the Company's employment policies, manuals, or other statements regarding
employment generally,  now existing or hereafter  promulgated,  the terms of the
Agreement shall control.

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Agreement as of the day and year first above written.


                                          ESPEY MFG. & ELECTRONICS CORP.

                                          By:         /s/David O'Neil
                                                      ------------------------

                                          Name:       David O'Neil
                                                      ------------------------

                                          Title:      Treasurer
                                                      ------------------------


                                          Employee:   /s/Howard Pinsley
                                                      ------------------------
                                                      Howard Pinsley



31